Vectren Indiana to close three coal plants

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Dive Brief:

Vectren Energy Delivery of Indiana-South last week unveiled a generation transition plan to cut carbon emissions by 60% by closing three coal plants, exiting its ownership of a fourth, and replacing the energy with a cleaner mix of gas and solar.

The utility is proposing a 50 MW universal solar project and a $900 million combined cycle plant that would generate between 800 MW and 900 MW. The proposals are a result of Vectren's Integrated Resource Plan, developed in 2016, which targeted a more "balanced" fuel mix, the company said.

Vectren has filed an application with the Indiana Utility Regulatory Commission to shutter a pair of 245 MW coal-fired units at the AB Brown plant and a 90 MW unit at FB Culley. But the company also wants to invest in upgrades for its largest and most efficient coal plant, ensuring it will continue to utilize the fuel.

Dive Insight:

Vectren's decision to shutter its coal plants copies a familiar nationwide trend. More utilities are closing coal plants as a result of environmental regulations and cheaper energy resources, such as solar, wind and natural gas.

Utility officials say they have already reduced carbon dioxide emissions by 30%. But coal will remain in the utility's lineup, with volumes largely unchanged until after 2023 when the new gas plant would come online, if approved.

The Brown and Culley plants will continue to operate as the new gas plant is developed, saying "we expect to use the same level of southwestern Indiana coal to help meet our customers’ energy demand,” EO Carl Chapman said in a statement. "Likewise, local coal will continue to be used to fuel Culley Unit 3 even after the new natural gas plant is operational in 2023.”

Ultimately, however, the new gas and solar generation will help to reduce emissions 60%, the company says. The solar project would be located in southwestern Indiana, and the gas plant would be constructed on the current site of AB Brown.

Vectren is also considering closing its ash ponds due to more stringent mandates from the U.S. Environmental Protection Agency. The company said its announcements will not impact this year's residential bills, although cost recovery will be requested beginning in 2019 for some of the projects. However, bill reductions related to the Federal tax code overhaul will help to keep average monthly electric bills unchanged through 2024, when Vectren could begin recovering for the gas plant.